Michigan Graduated Income Tax?
Yesterday, the Detroit Free Press had an opinion piece by a guest writer, State Rep. Jim Townsend, who serves as the Democratic chairman of the House Tax Policy Committee and represents the 26th District (Royal Oak, Madison Heights).
Townsend tells us in his opinion piece that “Michigan ranks 29th in personal tax equality and 48th in the percentage of tax revenue contributed by businesses, according to the Institute on Taxation and Economic Policy and the House Fiscal Agency.”
His argument is that Michigan citizens who make more money should have to pay more taxes — or I should say pay their “fair share” of taxes. Now, he does not look at the dollar amount that people pay in Michigan state income taxes; he looks at the percentage of their income they pay in state taxes.
For example, if you make $80,000 a year, you currently pay 4.25% totaling $3,400 in state taxes; if you make $40,000 a year you currently pay 4.25% totaling $1,700 in state taxes. However, Townsend fails to mention that the person making $80,000 a year pays double the amount of state taxes that the person who makes $40,000 a year does.
Hmmmm…I wonder why he forgot to mention that. His entire argument rests on the fact that both paid the same tax rate of 4.25%.
Thus, Townsend believes we have a regressive sales and property taxes.
He then goes on to attack corporations, you know the entities who — by the way, are made up of Michigan citizens — he believes do not pay their fair share.
Townsend states in his opinion piece that businesses contribute only 36% of state and local tax revenue — 48th in the country — while working families contribute more than their fair share of the remaining 64%.”
By the way, I like how he uses the term “working families.” Do you think he ever wonders who employees these Michigan citizens which allows them to then be considered “working families?”
Townsend states in his opinion piece that 35 other states and the federal government have a graduated income tax rate.
Townsend then poses the following question in his article, “How will future generations of entrepreneurs and workers pursue their dreams when our state lacks the education system, work force, infrastructure and other essentials that businesses and employees rely on to foster economic growth?”
When he posed the above question, I wonder if Townsend ever thought how we might have “future generations of entrepreneurs and workers” with a business tax rate that is higher than other states which could inhibit “futures generations of entrepreneurs” from starting their businesses in Michigan so we might actually have “future generations of workers?”
You see every action has a reaction. We do not live in a static environment or bubble — as many politicians believe — where people do not make choices based on changes in their environment.
I am not saying we should not debate the issue but when Townsend does not acknowledge the cons of his proposal, he is signaling to me that he either does not know them or he does not want to consider what those may be because they may undermine his wants and desires.
Should Michigan have graduated state income tax?
When looking at the dollar amount, is it fair to say to the citizens of Michigan who pay more in state taxes that they do not pay their fair share?
Would it not be nice to see a politician who proposes a change to actually acknowledge the cons of their proposal and address them?
Let’s discuss this today on my show the Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.
Or please feel free to start a discussion and write your thoughts in the comment section.